COMMERCIAL REAL ESTATE; A Comeback Role for Westwood Village

By TERRY PRISTIN

Published: December 1, 2004

Correction Appended

Retail settings that evoke the charms of an old-fashioned Main Street are all the rage these days, even when they are built from scratch, like the Grove, a popular shopping center that opened here alongside the Farmers Market in 2002.

By that standard, Westwood Village, the retail district that borders the University of California, Los Angeles, might be expected to be thriving. Not only does it have walkable streets, but it also has picturesque Spanish-colonial-style architecture dating to the 1920's, vintage movie houses and proximity to some of this city's most affluent residential neighborhoods, including Bel-Air/Holmby Hills and Brentwood, and to some 40,000 U.C.L.A. students and faculty members. The San Diego Freeway, to the west, is minutes away.

Indeed, the village once attracted moviegoers from all over the region (and still draws Hollywood premieres). But the village is lacking in the one asset that people here value most of all: convenient parking. So when multiplexes with ample parking began springing up throughout the area, Westwood found it hard to compete. Two violent incidents in late 1980's, including the killing of a 27-year-old bystander during a gang-related shooting, hastened the village's decline.

The diminished pedestrian traffic is reflected in the rents. Most annual rents range from $36 to $48 a square foot, according to real estate specialists --a fraction of what they are at the Grove or the Third Street Promenade in Santa Monica. Built and promoted as ''the town for the gown,'' Westwood Village is a college neighborhood without a major bookstore. Even the Gap store closed last year.

''Westwood appears to be a revolving door for tenants,'' said Paul R. Gienger, the president of the Topa Management Company of nearby Century City. ''They look at the area and say, 'This is fantastic.' They open a store and don't do as well as they expected to, and then they're gone.''

But Mr. Gienger's company is one of several that have invested in Westwood Village recently and are betting that it will make a comeback. Casden Properties, a local development company owned by the publicly traded Apartment Investment and Management Company, expects to begin construction early next year on Palazzo Westwood, a $100 million complex with 350 residential units and 50,000 square feet of retail space, on a long-vacant 4.25-acre site straddling Glendon Avenue. ''That's going to create a little energy and excitement,'' Mr. Gienger said.

Even now, Westwood Village is not entirely forlorn. It has a few successful upscale and fast-food restaurants, a couple of chain drugstores and some well-known businesses that have been around for decades, like Bel-Air Camera and Video, which has its own parking lot.

There are fewer vacancies along Westwood Boulevard, the village's main north-south thoroughfare, than there were a decade ago, with the rate now at 10 percent, consistent with the city as a whole, brokers say.

And in 2001, Ralphs opened the first supermarket in the village in 25 years on the site of a former Macy's. Both that store and a newer Whole Foods are doing very well, said Bob Baker, an executive vice president at Madison Marquette Realty Services, which manages the former department store building.

While parking is the village's major problem, it is far from the only one, real estate specialists say. The village has a patchwork of property owners who are not known for working together. James S. Rosenfield, national director of retail services for Cushman & Wakefield, said that when a violent incident occurs at a mall, ''you never hear about it, or they do what they can to mitigate it.'' When the 1988 gang-related killing occurred in Westwood, ''no one said anything and it gave the village a stigma of being unsafe,'' he said.

The absence of leadership means that no one is looking out for the village's appearance. A business improvement district was created in the 1990's, but ceased operating in 2002. ''In my mind, it's disappointing when you walk along the streets and see the roots of trees pulling up the sidewalk tiles,'' said Stan McElroy, a first vice president at CB Richard Ellis. ''These are issues that should be taken care of.''

Rick J. Caruso, the developer of the Grove, said the village had suffered because no single owner had enough leverage to attract a cluster of national chain stores at one time. ''There was never a concerted effort to continually get the right retailers,'' he said. ''No retailer wants to be the first one in. They want to go where they know they're going to be a success.''

Mr. Caruso said that the village's prospects could improve now that Mr. Gienger's boss, John E. Anderson, the octogenarian owner of Topa Management and more than three dozen other companies, has acquired 172,000 square feet of space, mainly consisting of storefronts along Westwood Boulevard.

Intended from the outset to be a ''village within a city,'' Westwood Village was built in the late 1920's by the Janss Investment Corporation, a large landholding company that sold hundreds of acres to Los Angeles, Santa Monica and Beverly Hills that the municipalities in turn donated to the university for a new campus. The village is bounded by Le Conte Avenue, Wilshire Boulevard, Tiverton Avenue and Gayley Avenue.

Correction: December 8, 2004, Wednesday
A Commercial Real Estate article in Business Day last Wednesday about efforts to the revive Westwood Village in Los Angeles misstated the relationship of the developer of a luxury apartment complex in the community, Casden Properties, and the Apartment Investment and Management Company. Aimco has a small interest in Casden Properties, not total ownership. (An earlier company named Casden Properties was totally acquired by Aimco in 2001.)